Exam 14: Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

Along any aggregate supply curve, there is only one:

Each of the following phenomena hinders the precise estimation of the natural rate of unemployment except:

According to the imperfect-information model, when the price level is greater than the expected price level, output will _____ the natural level of output

According to the imperfect-information model, in countries in which there is a great deal of variability of prices:

All of the following are ways that the modern Phillips curve differs from the relationship observed by A. W. Phillips in 1958 except that the modern Phillips curve:

Based on the sticky-price model, the short-run aggregate supply curve will be steeper, the greater the:

Use the following to answer questions : Exhibit: AD-AS Shifts -(Exhibit: AD-AS Shifts) Starting from long-run equilibrium at A with output equal to $\bar { Y }$ and the price level equal to P₁, a demand-pull inflation would be represented by a shift from:

An economy is initially in equilibrium at the natural level. The central bank increases the money supply. Graphically illustrate and explain short-run monetary nonneutrality and long-run monetary neutrality using the AD-AS model.

The hypothesis that hysteresis may play an important role in macroeconomics implies, among other things, that:

Explain the economist Robert Lucas's view on the imperfect-information model?

Inflation inertia is represented in the aggregate supply-aggregate demand model by continuing upward shifts in the:

Starting from the natural level of output, an unexpected monetary contraction will cause output and the price level to ______ in the short run; and in the long run the expected price level will ______, causing the level of output to return to the natural level.

To illustrate inflation inertia in an aggregate demand-aggregate supply model, the short-run aggregate supply curve shifts upward because of increases in ______, and the aggregate demand curve shifts upward because of increases in ______.

The short-run Phillips curve:

If price expectations are assumed to be correct, money demand is proportional to income, and there are no international capital flows, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases?

The idea that the natural rate of unemployment is increased following extended periods of unemployment is called:

The percentage of a year's real GDP that must be foregone to reduce inflation by 1 percentage point is called the:

Based on the Phillips curve, unexpected movements in inflation are related to ______, and based on the short-run aggregate supply curve, unexpected movements in the price level are related to ______.

When adaptive expectations are used to model inflation expectations in the Phillips curve, then the natural rate of unemployment is called the ______ rate of unemployment.

Use the aggregate demand-aggregate supply model to graphically illustrate the difference between demand-pull and cost-push inflation. Explain your graphs in words.